The company stands to earn $40 million per month from formerly-free modems.

The cable giant Time Warner faces a class action lawsuit over its decision to begin charging consumers a modem rental fee for equipment already installed on their premises. Early last month, the company began sending out notifications to consumers in the New York area about the $3.95 monthly fee increase.

The New York Daily Newssays a class action lawsuit has been filed in New York and New Jersey. It charges that Time Warner did not comply with its own terms of service, which promise customers 30 days notice before increasing prices.

Under Time Warner's new policy, customers have the option to purchase their own modem if they wish. However, the lawyers behind the lawsuit told the Daily News third-party modems will be unable to support Time Warner's "triple play" packages.

"It’s just a scam to increase revenue," attorney Steven Wittels told the Daily News. The lawsuit says that Time Warner will earn $40 million per month from the fee. It asks the courts to block implementation of the fee.

Modem rental fees are not uncommon in the cable industry. Comcast charges this correspondent $7 per month to use a company-owned modem. He has been too lazy to purchase his own modem in order to avoid said fee.